Clearwire Shares Surged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of wireless network operator Clearwire (NAS: CLWR) leapt upward 22% before pulling back in volatile trading after announcing a collaboration with China Mobile (NYS: CHL) to accelerate the development of 4G TD-LTE devices.

So what: TD-LTE, which stands for Time Division-Long Term Evolution, is being developed by China Mobile, and bears many similarities to regular 4G LTE that AT&T (NYS: T) and Verizon (NYS: VZ) are in the process of adopting. The announcement says that both companies have conducted successful trials and will work jointly to accelerate time-to-market availability and are hoping for commercial availability starting in 2012.

Now what: Financial terms of the arrangement were not disclosed, but the announcement is still a positive indication that although Clearwire may be down, it's not out. The move is another sign of Clearwire's commitment to building LTE into its existing WiMAX network after betting a little too much on the latter. The company is still hanging on by a thread as it burns through massive amounts of cash. Clearwire only has $78.8 million in cash and equivalents left as of last quarter, down from $1.2 billion only six months prior. Today's news is good, but it still may be too little, too late.

Interested in more info on Clearwire? Add it to your watchlist byclicking here.

At the time thisarticle was published Fool contributorEvan Niuowns shares of AT&T, but he holds no other position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of China Mobile.Motley Fool newsletter serviceshave recommended buying shares of China Mobile and AT&T. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.